Intel Corporation (NASDAQ:INTC): Earnings Expected To Remain Subdued

In December 2018, Intel Corporation (NASDAQ:INTC) released its most recent earnings announcement, which signalled that the business experienced a significant tailwind, more than doubling its earnings from the prior year. Below, I’ve laid out key growth figures on how market analysts view Intel’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for Intel

Analysts’ outlook for the upcoming year seems pessimistic, with earnings falling by -6.9%. Over the medium term, earnings should continue to be below today’s level, with a decline of -4.8% in 2021, eventually reaching US$20b in 2022.

NasdaqGS:INTC Past and Future Earnings, March 2nd 2019
NasdaqGS:INTC Past and Future Earnings, March 2nd 2019

Although it is informative understanding the growth rate each year relative to today’s figure, it may be more insightful to evaluate the rate at which the earnings are moving on average every year. The advantage of this method is that we can get a better picture of the direction of Intel’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is -1.5%. This means that, we can anticipate Intel will chip away at a rate of -1.5% every year for the next few years.

Next Steps:

For Intel, I’ve compiled three pertinent factors you should look at:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is INTC worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether INTC is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of INTC? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.